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[2020 Edition] Singapore Brokerage Houses: Guide To Investing In Overseas Stock Markets

Choosing the right broker goes beyond fees. Access to the markets you wish to invest in is another important criteria.


This article was first published on 14 March 2018 and updated with changes to the list of  stock brokerages providing brokerage services for overseas stock exchanges.

The world is becoming a much smaller place with the connectivity we enjoy today. Many Singaporeans regularly travel to cities across the globe, buy products only available in foreign economies and use content and digital platforms created overseas.

Yet, investing in overseas companies such as Facebook, Alibaba, Cathay Pacific, Nestle or News Corp, seems like a world away to many people. In fact, these are large multinational companies listed in major stock markets in the world, including the US, Hong Kong, Switzerland and Australia. And we can invest in them through brokerage firms in Singapore.

Read Also: Step-By-Step Guide to Stock Investing in Singapore

Markets Available On Brokerage Houses In Singapore

There are many reputable brokerage firms in Singapore, and majority offer the option to invest in overseas stock markets. We have compiled a list of local brokerage houses and the overseas stock markets available for trading.

 

Once you decided on the brokerage that gives you access to the markets you want, you can head over to their individual websites:

This list was compiled in a descending order of how many brokerages served a particular exchange. You should also note that this list is not exhaustive. What this means is that some markets, which Singapore brokerages may serve, is not listed as they may be less popular.

As you can see, investing in American and the Hong Kong stock exchanges is popular among Singapore investors, with all the local brokerages offer this market via its online trading service.

The next most popular exchanges are Australia (ASX), London (LSE) and Japan (TSE). ASX is one of the regional market which many Singaporeans turn to for trading, while the LSE and TSE are part of the top 10 trading markets in the world.

Interestingly, nearby ASEAN markets such as Malaysia’s BURSA, Thailand’s SET and Indonesia’s IDX, are not as widely available as their distant counterparts such as Germany’s XETR and Canada’s TSX. However, if you notice carefully, you will realise that there are more brokerage firms offering online trading for these ASEAN markets, as compared to XETR or TSX.

In addition, even though China offers an interesting investment proposition for many investors, they are not widely offered, although it has opened up recently.

The brokerages are also ranked in descending order, which means Maybank Kim Eng offers the widest coverage, while RHB offers the least.

Read Also: How To Diversify Your Investment Portfolio Outside Of Singapore (Via SGX Listed Companies)

Charges That You May Incur

Another thing you should note is that you will be subjected to a higher fee when you invest in foreign markets than when you purchase Singapore-listed shares. The main reason is that you have to keep these shares in a custodian account with the brokerage you bought it with.

Below are some of that brokerage fees that you may be charged with, but not limited to:

  • Commissions
  • Currency conversion rates/fees
  • Custodian/maintenance fees

You may also have to pay a fee for corporate actions such as:

  • Taxes from handling dividends
  • Fees from handling rights issue or stock dividends
  • Taxes, in the form of clearing fees, from the country you are buying from

You also need to be aware of the following:

  • Currency fluctuations
  • Any political or credit risks associated with the foreign country
  • Transferring of stocks to a different broker

While many of these charges are small, they can add up, sometimes over years, that can impact your overall overseas investment returns.

Read Also: Pros And Cons Of Investing In Local VS Overseas Stocks

Start Investing In Overseas Stocks Today

We are definitely not advocating that you turn a blind eye to stocks listed in Singapore. However, if you start to invest in overseas stocks as soon as possible, you can stand to enjoy many benefits. Namely, you’re forced to learn more and gain insights into the process.

Starting early usually also means starting with less. This is a good thing if you’re figuring your way around with the “what’s the worst that could happen” mentality. If you already have a sizeable amount to invest, consider investing in Singapore-listed stocks if you’re more familiar with it, and get your feet wet through overseas stock investments.

Lastly, you will be diversifying your holdings in new markets, new geographical regions and new businesses. This will help lower your overall portfolio risk.

Of course, this is not a magical solution to your investment success. You still need to stay prudent, continue monitoring your investments and continue your learning journey.

Read Also: COVID-19’s Impact On The STI: How Singapore’s Strongest Stocks Are Faring – And Should You Invest Now?

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